The regulatory framework for the transformation to a climate-neutral industry has evolved. To take account of the changes, we have revised our analysis on the role of climate protection contracts in the steel industry, which was mainly based on data from 2020. This updated study analyzes how climate protection agreements in the steel industry can be designed in such a way that – in conjunction with the reform of European climate policy – they have an impact on climate protection, energy security and a meaningful transformation of the economy as a whole.

Basic industries – steel, cement and chemicals – need to transform rapidly so as to remain competitive in a world that is headed towards climate neutrality. To achieve the climate targets defined for the sector, any new investment of the steel, cement and chemical industries must be compatible with the path to climate neutrality. This report by Agora Industry, FutureCamp and the Ecologic Institute takes a deeper look at Carbon Contracts for Difference – how they work, what their function should be, and how they can best be aligned with other policy instruments such as emissions trading.

Together with FutureCamp, Ecologic Institute examines in detail the design options of climate protection contracts. The focus is on the practical implementation of the instrument, such as the design in compliance with EU state aid law as well as overlap and demarcation with other (funding) instruments.